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Banks Drop Plans For Monthly Debit Card Fee
There have been plenty of headlines lately about the outrage consumers are expressing over the proposed debit card usage fee that many banks announced. The new debit card fee would zap as much as $5 per month from your account if you used your debit card for purchases (not at the ATM). Florida credit unions have seen membership surge as customers leave big banks, reports the St. Petersburg Times.
Consumers Revolt Against Banks Over New Fee Now, the largest banks have dropped plans for monthly debit card fees after being overwhelmed by negative feedback and massive account closures. Bank of America, Wells Fargo, SunTrust and JPMorgan Chase have all announced plans to drop the fees. As a result, their company stock prices tumbled.
Bank Of America Is Poster Child For Debit Card Fee Bank of America fell under scrutiny October 1 when it announced a $5 monthly fee for debit card use, which would go into effect January 1, 2012. Banks have been under pressure to find more sources of revenue as the result of bills passed by Congress that limited the income banks could earn on debit card fees charged to merchants. For example, the Durbin Amendment to the Dodd Frank financial reform bill lowered the cap on how much banks could charge merchants each time a customer used their debit card to pay for a purchase.
Banks Back Off From New Debit Card Fee In a sudden reversal, the banks gave in to irate customers. Credit unions and small banks were eating the big banks' lunch over the debit card fee issue. These competitors have been luring customers in recent weeks with aggressive marketing campaigns promising no debit card fees.
Bank of America Chief Executive Brian Moynihan told employees earlier this month that he was "incensed" at the criticisms. This is the equivalent of Tony Heyward, the former BP CEO, who infamously said that he would "like his life back" after the huge oil spill affecting the waters and shoreline of the Gulf of Mexico. Don't be surprised if Bank of America makes a change at the top. This is just another in a series of waffling blunders by Moynihan and his lieutenants.
Earlier this year Bank of America announced the elimination of overdraft fees only to reverse that decision. In addition, the bank has experienced debilitating online banking web site issues in 2011. On top of that they are ignoring small businesses who will ultimately be the ones that drive our country out of the slow job growth economy. All this adds up to a bad track record under the current leadership.
Bank Of America Makes It More Difficult To Avoid Fees Despite the positive news of backing down from the $5 monthly debit card fee, the bank is eliminating the Advantage checking account program, which required just $5,000 in checking and savings deposits to waive the fee. It will now take at least $20,000 in deposits and investment account balances to avoid the debit card fee as part of the bank's "Premium solutions" offering. Customers holding a mortgage with Bank of America also will be able to waive the fee.
Government Interference Is Root Cause Of This Mess Government meddling at its best. If your elected politicians did not interfere with the revenue stream that banks have this never would have happened. Sure, the merchants where you shop are happy with the law since they are saving thousands of dollars per year in bank fees. In fact, stores have raised prices you pay to cover the approximate 3% they have to pay to process credit and debit card transactions. After the new law was passed capping those fees, did those merchants lower their prices and pass the saving on to you? Heck no.
Face it Mr. and Mrs. consumer. This entire love triangle is a shell game and no matter what happens, the money will come out of your pocket. The trick for the banks is to devise a way to suck those dollars without you knowing it. The debit card fee idea was too obvious and took a free service that we depend upon and threatened to make it costly. Wasn't it nicer the way it was when these costs were hidden in the prices of the things you buy like gas, groceries, clothes and dinner on the town?
Author Resource:-
Nathan Randall, editor, Daily Dollar Newsletter provides free daily advice on money matters plus coupons and discount codes. FYI...you can now access the Daily Dollar Newsletter via iTunes podcast, YouTube video, and on Facebook and Twitter too.
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There have been plenty of headlines lately about the outrage consumers are expressing over the proposed debit card usage fee that many banks announced. The new debit card fee would zap as much as $5 per month from your account if you used your debit card for purchases (not at the ATM). Florida credit unions have seen membership surge as customers leave big banks, reports the St. Petersburg Times.
Based on the rapid retreat by banks to charge us for using our debit cards, there's no doubt that American consumers are unified in their outrage. Case closed. However, there is a fair fee that banks should impose on us immediately to help recoup the massive revenue loss that banks suffered when the government passed regulations which capped off swipe fees. Shut the front door! It is only fair!
A hardship letter for a short sale can be of major importance to a home owner who finds it difficult to continue making payments on there mortgage. Its vital that this letter include all of the factors that make repayment of the loan impossible. It could be the loss of a job, a major medical expense, divorce or other situation. Learn these key elements and more by reading this article.
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